Visa and Mastercard Propose $38 Billion Settlement to End Two-Decade Swipe Fee Dispute

Visa and Mastercard have proposed a $38 billion settlement to resolve longstanding allegations that they overcharged U.S. merchants through credit card “swipe fees,” according to reports. The move marks the latest attempt to close one of the most enduring antitrust cases in the payments industry.

The new offer follows U.S. District Judge Margo Brodie’s rejection of an earlier $30 billion settlement, which she deemed “paltry” compared to what the card networks could continue to collect. The revised proposal aims to address the court’s concerns while providing what the companies describe as “meaningful relief” to merchants.

Under the proposed terms, Visa and Mastercard would reduce interchange fees—typically 2% to 2.5%—by 0.1 percentage point for five years. Merchants could also refuse certain card categories, such as premium rewards or commercial cards, while standard consumer card rates would be capped at 1.25% for eight years. Neither company admitted wrongdoing.

Merchant advocacy groups, including the National Retail Federation (NRF) and the Merchants Payments Coalition, criticized the offer, arguing it does not address the underlying issue of high transaction costs. According to NRF data, swipe fees reached $111.2 billion in 2024, up from $100.8 billion in 2023—quadruple the level seen in 2009.

Attorneys representing merchants said the $38 billion represents projected savings through 2031, an estimate supported by economists Joseph Stiglitz and another expert, who suggested the deal could save merchants over $200 billion in total.

The Electronic Payments Coalition, which includes major banks such as JPMorgan Chase, Citibank, and Bank of America, backed the settlement. Its Executive Chairman Richard Hunt said the proposal would reduce fees more than a pending bipartisan Senate bill that seeks to regulate card costs.

The settlement requires court approval before taking effect. If approved, it would conclude a 20-year legal battle that has shaped the broader debate over the cost of card acceptance in the U.S. payments system.